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Holding History
Klarman first bought shares of Syneron Medical in the second quarter of 2006, adding 643,400 shares of the company at an average price of $23.81. Prices dipped down in the next quarter to $21.53, prompting Klarman to more than double his holdings to 1.5 million shares. As the price of Syneron continued to drop through 2007 and 2008, Klarman kept adding to his holdings, at one point holding more than 3.1 million shares. However, in the first quarter of 2009, Syneron stock bottomed out to less than $6.40 per share, and Klarman suffered more than a 70% loss on his initial investment. He sold roughly 1 million shares in the third quarter of 2009 for an average price of $9.03 and sold 600,000 shares in the next quarter at an average price of $10.60. He has since remained steady at exactly 1.5 million shares for the past year and a half as Syneron stock slowly crept back up in price. Last week, he added 155.74% to his holdings at an average price of $12.22 to bring his current shares at 3,836,071.
Syneron Medical Ltd. (ELOS)
Syneron Medical Ltd. is an aesthetic device company with a large product portfolio and a global distribution system. It manufactures and distributes medical aesthetic devices that are powered by the proprietary, patented elōs (electro-optical synergy) technology that combines bi-polar radio frequency and laser/light energy. The company's innovative elōs technology provides the foundation for highly effective, safe and cost-effective systems that enable physicians to provide advanced solutions for a broad range of medical-aesthetic applications.
According to their CEO Louis P. Scafuri, the medical aesthetic market is growing in the low double digits, with Syneron owning 39% of the market out of the publicly traded aesthetic device companies. Syneron also stated that it is investing heavily to understand the unique issues pertaining to Asian skin care, as the highest growth rate in the cosmetic industry currently comes from Asia.
As reported in their last quarterly filings, revenues for the past quarter increased by 15.8% year over year to almost $50 million, but compared to last quarter it actually decreased by $3.7 million. Net income was a loss of $2.4 million, a decrease from last quarter's $8.38 million profit. Cash flow from operations was a loss of $5.8 million and free cash flow was a negative $6.6 million, continuing a recent trend of very low or negative free cash flow. ELOS stock currently has a 2.21 P/S ratio as well as an earnings per share of -0.07.
Recent Headlines
On April 26, 2011, a summary judgment decision of the district court regarding Palomar Medical Technologies Inc.'s damage claim against Syneron's subsidiary, Candela Corporation, indicated that Palomar lacks the legal grounds to seek royalty damages for international sales, "significantly reducing Candela's potential financial exposure in the litigation" according to Shimon Eckhouse, chairman of the board of Syneron. This prompted Syneron to decrease their estimated range of loss contingency associated with the litigation from $0 - $50 million to a new estimated range from $0 - $21 million.
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